DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE -

Things don’t al­ways turn out the way you ex­pect. Last week, this proved right in more ways than one where the RBI mon­e­tary pol­icy an­nounce­ment was con­cerned.

Dr. Ni­ran­jan Hi­ranan­dani, Pres­i­dent, NAREDCO, ex­plained, "The Re­serve Bank of In­dia’s MPC was ex­pected to hike rates in its lat­est mon­e­tary re­view. In­stead, it sprang a sur­prise and main­tained ‘sta­tus quo’. The bank­ing sec­tor, like it has done just be­fore the past two re­views, hiked in­ter­est rates. The RBI didn’t. This has real es­tate won­der­ing whether it is just a bit of bother – or are we look­ing at an in­com­plete pic­ture, and can ex­pect to see some­thing new in the com­ing days. Home loan rates re­main un­touched – in the­ory, as per the RBI’S stance. A sec­tion of banks have a day be­fore the RBI an­nounce­ment, hiked in­ter­est rates. So, will we see them rev­ers­ing the lat­est hike – or, will we see some­thing akin to the RBI an­nounc­ing a hike in rates? The jury’s out on this, we will wait and watch."


Jaxay Shah, Pres­i­dent, CREDAI Na­tional, pointed out, “RBI'S de­ci­sion to keep the repo rate un­changed is a re­lief to de­vel­op­ers, home buy­ers and real es­tate stake­hold­ers at large. How­ever, the econ­omy is too pre­car­i­ously poised for real es­tate to pull it­self by its boot­straps. We hope in par­tic­u­lar for de­ci­sive steps to end the credit freeze. CREDAI strongly be­lieves that any re­duc­tion in RBI repo rate should be im­me­di­ately re­flected in the float­ing in­ter­est rates charged to home buy­ers. Supreme Court’s di­rec­tive to RBI to as­sess whether ben­e­fits of re­duc­tion in in­ter­est rates are be­ing passed on to the bor­row­ers is ex­pected to alert banks and fi­nan­cial in­sti­tu­tions of the need to do so.” Sur­prise

An­shul Jain, Coun­try Head & Manag­ing Di­rec­tor, Cush­man & Wake­field In­dia, opined, “Un­changed repo rate af­ter two suc­ces­sive hikes was a sur­prise. How­ever, lower in­fla­tion ex­pec­ta­tions and an uptick in man­u­fac­tur­ing and con­struc­tion ac­tiv­ity with an as­so­ci­ated in­crease in FDI and ro­bust GDP growth al­lowed some head room to the RBI to keep the rate un­changed.”


An­shu­man Mag­a­zine, Chair­man, In­dia and South East Asia, CBRE, said, “The de­ci­sion by the RBI to keep key rates sta­ble was taken in the back­drop of in­fla­tion be­ing largely in con­trol. The move im­parts flex­i­bil­ity to the RBI to move in ei­ther di­rec­tion in the com­ing months. Any hike in repo rate would have im­pacted con­sump­tion sen­ti­ments and also the real es­tate sec­tor.”


Ramesh Nair, CEO & Coun­try Head, JLL, em­pha­sised, “Keep­ing a sta­tus quo on pol­icy rate is a wel­come step for the real es­tate sec­tor as it will give the much-needed im­pe­tus to the hous­ing mar­ket which has been show­ing signs of re­vival in the last six months. For home buy­ers, the tim­ing could not have been bet­ter as lend­ing rates are not ex­pected to in­crease from cur­rent lev­els. Be­sides pro­vid­ing a ma­jor fil­lip to buyer sen­ti­ment, RBI’S move should also trans­late into boost­ing de­mand. With the lat­est GDP num­bers in­di­cat­ing bet­ter growth prospects for the In­dian econ­omy, we hope the cen­tral bank will have enough el­bow room to make it con­ducive for home buy­ers.”

Joe Vergh­ese, Manag­ing Di­rec­tor, Col­liers In­ter­na­tional In­dia, termed it as a good de­ci­sion. “Con­sid­er­ing the mood of un­easi­ness in the bank­ing and fi­nan­cial sec­tor, the RBI has taken the right step by not go­ing in for an­other hike in in­ter­est rates at this stage. This would have only fur­ther damp­ened the sen­ti­ments across the real es­tate in­dus­try, es­pe­cially with the fes­tive sea­son round the cor­ner”.


Shishir Bai­jal, Chair­man & Manag­ing Di­rec­tor, Knight Frank In­dia, un­der­lined, “The RBI had hiked the pol­icy rates by 50 bps in the pre­vi­ous two pol­icy re­views. While we are in a ris­ing in­ter­est rate cy­cle now, the pause will pro­vide a tem­po­rary re­lief to the home buyer sen­ti­ment and sup­port the fes­tive sea­son de­mand.”

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